Are unsecured debts discharged in Chapter 7 Bankruptcy?

In South Dakota, unsecured debts are discharged in Chapter 7 Bankruptcy. Chapter 7 Bankruptcy in South Dakota is also known as a “liquidation” or “straight” bankruptcy. When filing for Chapter 7 bankruptcy, a debtor’s unsecured debts are dismissed and no longer the responsibility of the debtor. Unsecured debts are considered to be those debts that are not secured by collateral, such as credit cards, personal loans, medical bills, back taxes, utility bills, and certain types of lawsuits. When a Chapter 7 Bankruptcy is filed, the debtor’s non-exempt property is typically sold by a trustee and the proceeds are distributed to the creditors. The trustee generally pays the creditor with the highest priority first and then pays the next highest priority creditor. After all the creditors have been paid, any remaining debt is legally discharged, meaning the debtor is no longer responsible for paying the remaining balance of the debt. The benefits of filing a Chapter 7 Bankruptcy include discharge of unsecured debt, the ability to keep certain assets that are exempted from the bankruptcy, and a fresh start. It is important to note that certain types of debt are not dischargeable in Chapter 7 Bankruptcy, such as student loans, alimony, and certain taxes. Additionally, filing for Chapter 7 Bankruptcy does remain on the debtor’s credit report for up to 10 years. As such, it is important to discuss your financial situation with a qualified attorney prior to filing.

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Are unsecured debts discharged in Chapter 7 Bankruptcy?

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